Disinvestment

ARTICLES ABOUT DISINVESTMENT BY DATE - PAGE 2

University of Illinois President Stanley Ikenberry had a novel argument for withdrawing university money from firms that do business in South Africa. He told the board of trustees that failing to do so could result in economic loss if there were a rush of disinvestment that drove the price of these securities down. At least this framed the discussion of the controversial issue of disinvestment in the relatively narrow terms of financial strategy. But behind this is the moral question.

Congress should seriously ponder a recent interview with Eugene Terre Blanche, leader of the Afrikaner Resistance Movement (ARM.) Mr. Blanche was asked: "Will sanctions hurt South Africa in any meaningful manner?" He replied: "No. In fact, we will become stronger. South Africa possesses minerals and raw materials, of which the rest of the world is in urgent need. We are in a position to support ourselves, without foreign interference. So we can apply sanctions, in many ways, to the rest of the world.

American and other Western businesses continue to flee South Africa while the White House and Congress debate further sanctions against the troubled nation. In the last 18 months, at least 55 American companies have said they are pulling out. They include Bell & Howell, General Electric, GTE and Phillips Petroleum. U.S. officials say 200 Western corporations are in various stages of disengagement from South Africa in an unprecedented exodus of money and people from a country that seems headed for racial war. As a result, the Reagan administration said last week, the push in Congress for imposition of punitive economic sanctions, such as a formal ban on new American investment in South Africa, have become to some degree irrelevant.

The subject of disinvestment in South Africa remains a principal topic in our newspapers. It continues to be fueled by reports of tribal killings, and most recently by student disturbances at the University of Illinois. The current U.S. policy and philosophy of supporting investment is starting to crumble to the student chants of disinvestment. But will disinvestment really upgrade the lives of black South Africans? In reality, no. Apartheid has existed for 100 years. Yes, there have been sporadic riots during that time.

The U.S. campaign to halt investments in South Africa, opponents here argue, would create massive black unemployment and result in revolution rather than peaceful change. Investment helps undermine South Africa's apartheid racial system, they say, because the system was tailored for a country with low economic growth. In the long run, apartheid probably cannot survive the strains of high growth and rapid industrialization. The basis of this argument is that, in a low-growth economy, the 20 percent of the population that is white can provide all the managerial and administrative skills the country needs.

By William Raspberry. (copyright) 1985, Washington Post Writers Group | April 23, 1985

For those who hate South Africa's treatment of its black majority, disinvestment is a handy, all-purpose tool. It even shows some limited signs of working. Divestiture, though it looks and sounds a lot like disinvestment and stems from the same outrage, is largely a ritual act. The distinction is my own. Activists seem to use the two words interchangeably. Disinvestment (or at any rate the threat of disinvestment) appeals to those who favor a club to beat the Afrikaners into line, to those who prefer a carrot to tempt them into behaving more decently and to those who wish to punish a racist government for what it has already done.

A few years ago the South African government could shrug off the attempts by antiapartheid campaigners in the United States to invoke economic sanctions against this country. But now it appears certain that some sort of antiapartheid legislation will emerge from the U.S. Congress this year, and the South African government is deeply worried. Government officials here express their concern openly. The state-run television carries frequent items about the campaign and quotes South Africans on how to counter it. The business community in South Africa is alarmed by the campaign, and it is putting more pressure on the government than ever before to change racial laws to forestall legislative sanctions.